Wachovia, preparing to enter the health savings account (HSA) fray, hopes to differentiate itself by presenting its version of the product as particularly suited to retirees.

The development of Wachovia's HSAs will be led by the retirement services unit although branch banking and treasury services are collaborating on it. The accounts will be available to all, but the Charlotte, S.C., bank believes there is a compelling case for customers to use them to pay for healthcare costs in retirement, says Joanne Young, Wachovia's HSA product manager.

"Baby boomers are moving into retirement, and one of the significant risks they need to mitigate is health costs-financing 20 or 30 years of healthcare," says Laura DiFraia, a Wachovia senior vice president for product development and marketing. "HSAs, we think, will become the primary vehicle to save for future healthcare costs."

HSA industry leaders such as HSA Bank and Exante Bank may have a big marketshare, Young acknowledges. But Wachovia's intention is to compete with a "robust" lineup of products it can package alongside its HSAs. "We want be a player in health savings accounts and have it match and go along with the retirement side of the bank," she says. Wachovia will also target midsize and large employers, who "are focusing on how to reduce costs and provide health insurance to their employees," Young says. "They are the ones who are really driving growth."

Young rejected the notion that Wachovia has moved too late to grab a significant slice of the HSA market. "I don't think we are behind the curve at all," she says. "The Wachovia brand will help."

JoAnn Laing, the president and chief executive officer of Information Strategies, a research firm that follows the HSA business, agreed that Wachovia has plenty of time to make its mark. "No one's totally nailed it yet," she says. "The market is growing and attracting new accounts and new deposits."